MARK LEIBOVIT'S GOLD NEWS

Ecuador sends its gold to Goldman Sachs

Mark Leibovit, author of the Leibovit VR Gold Letter, was named by Timer Digest as the No. 1 gold market timer for 2011, the No. 1 gold market timer for the 5-year period ending in 2010, and the No. 1 intermediate stock market timer for the 10-year period ending 2007. He served for seven years as a consultant "Elf" on Louis Rukeyser's "Wall Street Week" and over 30 years as a Market Monitor guest for PBS. He has appeared on CNBC, Fox, Bloomberg and others, and been interviewed in Barron’s, Business Week, Forbes and The Wall Street Journal.

Editor’s note: Mark Leibovit is one of the investment world’s top-rated gold timers, and helps investors anticipate and benefit from both the ups and the downs of the precious metals markets with his Leibovit VR Gold Letter (available to WND readers at a huge discount).

Ecuador agreed to transfer more than half its gold reserves to Goldman Sachs Group Inc. for three years to give the government easier access to cash.

The central bank said it will send 466,000 ounces of gold to Goldman Sachs, worth about $580 million at current prices, and get the same amount back three years from now. In return, Ecuador will get “instruments of high security and liquidity” and expects to earn a profit of $16 million to $20 million over the term of the accord. The central bank didn’t detail additional terms of the transactions, such as any fees or financing costs paid to Goldman Sachs.

The deal comes as the South American country’s government, which defaulted on about $3.2 billion of bonds five years ago, seeks to cover a budget deficit forecast by the Finance Ministry to swell to a record $4.94 billion this year. President Rafael Correa said in April he also planned to sell about $700 million of foreign debt this year in the country’s first international bond sale since the 2008 and 2009 default.

The U.S. Mint will stop rationing U.S. silver eagle coins next week, for the first time in 16 months, Mike Zielinski reports at Coin Update.

“Despite the restraints on availability,” Zielinski writes, “year to date silver eagle sales have reached 21,436,500 ounces, according to the latest data available on the Mint’s website. The current sales level and the removal of allocation create the possibility for another annual sales record. During 2013 the Mint had sold a record high 42,675,000 ounces.”

One of the biggest providers of exchange traded funds has entered the race to develop a new global silver price benchmark when the 117-year-old London silver fix is disbanded in August.

ETF Securities, which pioneered gold-backed ETFs and oversees $19 billion in assets, said it had submitted a detailed proposal to the London Bullion Market Association, and was consulting market participants.

Mainstream news organizations get a hint about gold market manipulation

GoldMoney founder and GATA consultant James Turk tells King World News that the Barclays gold market manipulation case is only a tiny part of the price suppression scheme engineered by Western central banks, but at least it has opened the eyes of the mainstream financial media a little bit.

Gold may have found something of a temporary range in the $1,240s over the past week. Sentiment has moved against it and barring some unforeseen event it may continue to fall through the early northern summer – traditionally a weak time for precious metals. But there is a huge dichotomy in its performance in that supply/demand fundamentals continue to look ever more positive, yet gold, and other precious metals, have been continuing to fall.

Now whether this is, as some suggest, due to the machinations of the bullion banks suppressing the gold price on behalf some central banks (notably the U.S. Fed and the European Central Bank), or just a collapse in pro-gold sentiment in the general investment arena remains to be seen, but if the latter, some turnaround trigger could see gold positive sentiment return and the price soar – but when might this happen?

Jeff Nichols, one of the more down-to-earth of the normally pro-gold commentators, in his latest missive to clients, picks up strongly on the ever-improving fundamentals point. Despite a 5 percent fall in the gold price over the past couple of weeks he feels there is no reason for gold investors to despair. Easy to say as a commentator, but tough for those who may have seen their gold investments dive over the past two years. Is there no end to the decline?

Canadian legend John Ing warned King World News that the moves by the European Central Bank and other central planners will end in disaster. Ing, who has been in the business for 43 years, said it is just a matter of time before disaster strikes, and he also spoke about key events in a number of other markets, including gold.

“Gold had been in a funk for the past week because the U.S. dollar had been the currency of choice. However, Thursday was what I consider a turnaround day as Draghi dropped European rates to negative territory …

“And we know that when interest rates are negative it is not only inflationary but it’s also good for gold. Gold jumped after being inside of a trading range the past couple of weeks. The stock markets have also continued showing strength, but it seems to be a bull market that no one is enjoying.

“There now seems to be an ingrained belief in the invincibility of the global stock markets. Investors now see this as a risk-less market. We believe that the move in the markets has been Fed-induced. But the negative interest rates in Europe are an indication that we will see more money printing and that will be good for gold.

“Against that backdrop is that Ecuador swapped their gold. That’s a country with financial problems and they have had to use their gold that’s held in reserves as a way to raise funds. We’ve seen other countries doing that in the past, including Russia. But Russia is buying gold because the Russians remember what it’s like to have financial problems.

“That’s the history of this fiat period of money inflation. We have seen times of tremendous chaos. As an example, we’ve seen the Mexican peso crisis, the Asian crisis in the late 1990s, the 2008 crisis, etc. All this came about because governments print money to get out of their problems. Of course the consequences come afterward.”

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